•As energy accounts for 40% of manufacturing costs

By Yinka Kolawole

Nigerian manufacturers have been advised to transition from fossil fuels to sustainable energy sources to cut operating costs and wastage.

The call was made at a meeting on smart energy utilization hosted by the Manufacturers Power Development Co. Ltd (MPDCL) in Lagos.

Speaking at the event, Director General of the Manufacturers Association of Nigeria (MAN), Segun Ajayi-Kadir, noted that high cost of energy is one of the factors driving up the cost of production.

According to him, energy accounts for 30 to 40 percent of manufacturers’ production costs depending on how power-intensive their processes are.

Ajayi-Kadir had, earlier in the year, lamented that automotive gas oil (AGO), also known as diesel, which is used in generating power for manufacturing operations, gulps about 80 percent of their profits.

His words: “Do you know that diesel is taking 80 percent profit of surviving manufacturing firms in Nigeria? Which manufacturer can cope with that astronomical price for energy to produce and you won’t expect him to increase his products in the country?”  

The MAN DG however noted that the country’s energy challenges also present opportunities for growth, innovation and leadership, urging manufacturers to transition to sustainable energy sources.

“The global trend is clear, sustainable energy is the future. Nigeria, with its abundant renewable energy resources, is well-positioned to capitalise on this shift and we can move on to explore how best we can change the narratives,” he said.

“We are therefore committed through the Manufacturers Power Development Company to support members in transitioning from fossil fuels to sustainable energy sources.

“This initiative will not only reduce energy costs and wastage but provide more efficient optimisation of energy and corporate policy directive that will drive acquisition of modern equipment, which by design function through the use of less energy,” he stated.

Ajayi-Kadir added that the transition will save manufacturers time and effort in repairs, leading to the ultimate goal of enhancing their competitiveness within and globally.

Also speaking, MAN’s Director of Research and Advocacy, Oluwasegun Osidipe, said that the adoption of the GEF-UNIDO Industrial Energy Efficiency (IEE) and Resource Efficient Cleaner Production (RECP) will improve the cost of production and profitability of manufacturers.

He added that its adoption will provide a competitive edge for manufacturers and improve their brand image and visibility while reducing their exposure to rising global energy prices and protecting the environment.

In his remark, Chairman of MPDCL, Ibrahim Usman, said the organisation recognises the critical role energy plays in driving industrialisation and economic development.

“Our mission is to provide cost-effective, sustainable, and reliable power solutions to manufacturers, empowering them to compete within the continent and globally,” he said.